Income taxes
| in CHF 000 | 2021 | 2020 | ||
|---|---|---|---|---|
| Deferred income taxes | 32 012 | 20 486 | ||
| Deferred income taxes | (11 890) | (17 306) | ||
| Total | 20 122 | 3 180 |
Analysis of tax expense
| in CHF 000 | 2021 | 2020 | ||
|---|---|---|---|---|
| Income/(loss) before taxes (EBT) | 852 822 | (91 462) | ||
| Average income tax rate | 19.5% | 13.4% | ||
| Expected tax expense (using weighted average tax rates) | 166 305 | (12 268) | ||
| Credits and income taxes incurred from previous periods | 248 | 723 | ||
| Use of previously unrecognised loss carry-forwards | (379) | (82) | ||
| Unrecognised deferred tax assets on tax loss carried forwards | 2 008 | 2 175 | ||
| Expiry of capitalised tax loss carryforwards | 1 124 | – | ||
| Impact of Swiss participation exemption and other non-taxable items | (47 722) | (2 025) | ||
| Expenses not deductible from tax and income not credited to the income statement | 4 | (129) | ||
| Non-tax-deductible impairment on goodwill | – | 14 849 | ||
| Change in deferred taxes due to change in tax rates | 4 | 1 151 | ||
| Tax effects on investments | (101 395) | (1 308) | ||
| Other impacting items | (75) | 94 | ||
| Income taxes | 20 122 | 3 180 | ||
| Effective tax rate | 2.4% | –3.5% |
The expected average tax rate equals the weighted average of the rates of the consolidated companies. This is 19.5 per cent in 2021 (previous year: 13.4 per cent) and is derived from the weighting of the expected tax rates for each company. Both positive and negative results for the individual companies feed into the calculation for the expected tax rate, taking into account the applicable tax rates in each case, therefore resulting in 2021 in a higher expected tax rate compared with the previous year.
The effective tax rate changed from -3.5 per cent to 2.4 per cent. This deviation from the expected tax rate was due more than anything to the impact of investment deductions and other non-taxable income and to the tax effect on investments. The tax effects on investments include the revaluation in value of the TX Group’s shares in the SMG Swiss Marketplace Group AG joint venture, which was reflected in the income statement through the financial result in the amount of CHF 778.5 million. Together with the impact resulting from both book depreciation and amortisation and also revaluations on carrying amounts (without any deferred tax consequences) – and with tax expenses reducing accordingly – other tax effects on investments were considerably higher in 2021 too.
The biggest impact of investment deductions and other non-taxable income in 2021 is due to the sale of 10 per cent of the shares in SMG Swiss Marketplace Group AG. This resulted in a significant increase on the previous year. Unrecognised deferred tax assets on tax loss carryforwards result from the estimate that, based on their income situation, the relevant companies do not fulfil the prerequisites for the realisation of losses.
In 2020, the non-tax-deductible impairment on goodwill with a theoretical tax effect in the amount of CHF 14.8 million was attributable to the impairment on goodwill of CHF 85.0 million for the Tamedia segment. More information on goodwill and the impairment testing performed can be found in Note 22.